Running a family business? Succession planning is absolutely vital to Mandurah businesses and to the success of future generations in keeping your business going when you no longer can. Many business owners don’t want to think about giving up the reins to their business, but you certainly don’t want to leave it too late to have plans in place for who will take over your business.
At Ashok Parekh & Co, our accountants will work with each individual to create a personalised plan to suit your needs. We know that every business owner is different, and our aim is to make the succession planning process as easy as possible, so you can get back to focussing on growing your business now.
What Does Succession Planning Cover?
There are numerous areas covered by succession planning which helps ensure your business is protected and passed on as you wish. This can include:
- Sale of the business
- Generational succession where the business is passed down through the family
- Employee/management buy-out
- Public listing
- Structured realisation of assets
On top of this, there are four main areas covered by succession planning that business owners can take.
- Continuing the business – you need to consider whether you would like the business to continue on without you or whether you would prefer to close down the business and sell off any business assets.
- Choosing a successor – If you do decide to have the business continue on, you will need to appoint a successor for when you are ready to leave. This may be a family member, an employee or any other person you may choose. By choosing your successor early on, you have the time to transition them into the running of the business and how you expect the business to be run. Another benefit to have a successor already chosen is that employees can feel a little safer in the knowledge that they will still have a job once you are ready to leave the business.
- Debt management – More often than not, small business owners have bank loans of lines of credit helping them ensure the smooth running of their business from day to day. However, upon the death or disability of the business owner, these loans may be called in at any time, forcing the repayment of the debt. A succession plan will take into consideration these issues and will look at how you can manage debt repayment and what assets could potentially be sold off to cover those loans.
- Tax minimisation – One area that is essential to cover when planning for the future of your Mandurah business is creating strategies that will minimise any tax that your successor may have to pay during the transfer process. This may include capital gains and stamp duty.
As a business owner, having plans in place will help make a succession plan for any Mandurah business easier and straight-forward. If you’ve like to have a chat with our experienced accountants, we’ll happily sit down for a coffee and a chat in our office or yours.
Book an appointment to speak to one of our professional and experienced accountants on (08) 6168 2448, or book online now.